Backpackers tax – 2016 Federal Budget

In the Federal Budget 2016-17, which has been released yesterday, the government decided to implement “Backpackers tax” on working holiday makers by forcing them to pay 32.5c for every dollar they earn up to $80,000. It will commence from 1 July 2016.

The change will mean that working holiday makers will be treated as non-residents for tax purposes.
By comparison, Australians earning less than $20,000 a year enjoy a tax-free income, then pay 19c in the dollar once they cross the threshold.